Letter: Regulatory Authority and Priorities of the Consumer Financial Protection Bureau
The Pew Charitable Trusts, joined by banking, consumer and civil rights organizations, submitted a letter to the Consumer Financial Protection Bureau (CFPB) asking them to act quickly to ensure that consumers are protected from unfair banking practices and are provided important information about their accounts. The groups acknowledge that there are certainly many endeavors that require the attention of the CFPB, but checking accounts, a product that nine out of 10 American households use, should be a top priority. Research has conclusively shown that hidden bank fees and practices as well as the lack of clear disclosures can be harmful to consumers. According to the letter, the undersigned organizations are all committed to reasonable regulations that protect consumers and allow for competition in the consumer finance industry. The groups are asking that the CFPB do the following:
- Require information on important checking account terms to be disclosed in a one-page “Consumer Choice Box”;
- Require complete disclosure of all overdraft options;
- Require reasonable and proportional overdraft fees;
- Require the posting of deposits and withdrawals in a neutral manner; and
- Examine the prevalence of dispute resolution clauses in checking account agreements and the existence of fee shifting provisions that require the accountholder to pay at least a portion of the bank’s costs when a dispute occurs.
These are important policy changes that have wide public support and that the CFPB can and should consider as priorities in the early stages of its work. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provided the CFPB with rulemaking authority that should be used to carry out these policy recommendations. Because the CFPB has the authority to implement the Truth in Savings Act (TISA) and Electronic Fund Transfer Act (EFTA) and has new authority to regulate abusive practices and limit mandatory arbitration, it could achieve all of these important goals.